London shares remain largely flat in early trade on Tuesday with Monday's strong session causing investors to pause for thought even with hopes increasing that a short-term EU debt deal can be struck with Greece. The benchmark FTSE 100 index nudges modestly higher, making single-digit gains to 6,833, although midcaps are a stronger markets, the FTSE 250 up 0.3% at 17,960.
Retail powerhouse and running Shares Play of the Week Sports Direct International (SPD) heads the Footsie leader board early, adding 3.3% at 725.5p as RBC Capital Markets upgrades its recommendation to 'outperform' and its price target from 650p to 800p, advice that is clearly tempting investors to act.
But the big story on the corporate news front is the possible merger of bookies-to-bingo groups Ladbrokes (LAD) and Gala Coral. Ladbrokes soars more than 10% to 134.5p after confirming it is in talks with its rival over a possible merger of the two companies. Chief executive Jim Mullen says the deal would create a business of significant scale and generate substantial cost synergies.
Oil services outfit Petrofac (PFC) is up 9.7% to 954p as investors show their relief at a lack of significant nasties in today’s trading update. As at the end of May the company is sitting on an order book of $20.5 billion but the company did reveal it expects to incur £30 million of pre-tax costs on its Laggan-Tomore project in Shetland. Sector peer Hunting (HTG) also enjoys gains – up 4.9% to 654p.
Multi-utility Telecom Plus (TEP) is also back in investors good books, as flagged by Shares recently, after April's shock profit warning and £11 million bad debt write-down. The shares jump more than 3.5% to 850p as the group posts typically impressive full year figures, including a 21.3% jump in pre-tax profit. The full year payout is also sharply hiked, up 14.3% to 40p a share.
Among the bigger movers, back on the main market block Nomad Foods (NHL) soars on its readmission to trading, the shares rocketing more than 70% to 20.5p.
Media firm Tangent Communications (TNG:AIM) crashes 22% to 2.25p as it warns of a likely shortfall in its operating performance this year. The company blames underperformance in Tangent Snowball, its media agency. That's led to the axe for Tangent Snowball boss Steve Grout.
Installation and building minnow Bilby (BILB:AIM) jumps 14% to 97p as it posts a 14-month pre-tax profit of £1.98 million, a sharp increase on the previous year's £0.83 million, even factoring in the extended year.
Alecto Minerals (ALO:AIM) rises 15% to 0.14p as it raises £0.3 million gross via a placing of 300 million new shares at 0.1p each.
Kazakh hydrocarbons play Roxi Petroleum (RXP:AIM) slumps 8.6% to 16p despite reporting it swung to a $20.1 million pre-tax profit in 2014 (from a $9 million loss in 2013). Investors ignore this profit – linked to reversal of impairments on its BNG asset – and focus on the uncertainty over future income with a rise in 2015 predicated on the deeper wells on BNG ‘producing consistently’.
Elsewhere, multi-sector distributor Bunzl (BNZL) buys four businesses in North America, Columbia and France for an undisclosed sum and expects to report slowing organic growth in the six months to end-June. Overall revenue is likely to be 6% higher at constant currencies, mainly because of a positive contribution from acquisitions, but slower growth in North America means organic growth will fall to 1%. The shares slide 2.2% to £18.49, heading the Footsie loser board today.
Greetings cards-to-Christmas crackers maker International Greetings (IGR:AIM) gathers up 4.1% at 126.5p as excellent full-year results drive upgrades and declining net debt triggers a return to the dividend list. Shares outlined the small cap's re-rating potential and scope for reinstating the shareholder payout in April.
Paper specialist James Cropper (CRPR:AIM) adds 1% to 445p on a 67% increase in profit before tax to £3.5 million for the year ended 28 March. This was driven by strong revenue and profit growth in its technical fibre products division, for which production capacity is to double this year.
Speciality chemicals outfit Johnson Matthey (JMAT) is among the FTSE100's biggest risers, adding 2.5% to £32.33 after Citigroup upgraded the stock to 'buy' from 'neutral' and raised the target price to £36.00.
Elsewhere among the FSTE100's gainers, defence specialist Meggitt (MGGT) climbs 2.8% to 480.8p after the stock had its 'outperform' rating reaffirmed by equities research analysts at RBC Capital on Monday. The group is also set to receive £5 million in government funding as part of plans unveiled by business minister Anna Soubry to 'keep Britain at the forefront of the global aerospace market'.